Exclusive Industry Report on PPP Loans provided by Fastener News Desk
2020 was a different kind of business year due to Covid19 with PPE, remote work, and quarantine the topics of office conversation. Whole industries and thousands of businesses were forced to shut down early on in the pandemic causing a major problem for supply chain merchants. As in other industries, fastener companies felt the immediate impact of this economic bomb. The financial fallout from this crisis led to the federal government’s Paycheck Protection Program (PPP), which is an SBA loan program that helps businesses keep their workforce employed during the Coronavirus (COVID-19) crisis. There are many resources about the program but for me the most important news is that companies can apply to have the loans forgiven.
This program also includes a loan forgiveness provision: PPP Loan forgiveness terms
PPP Loans made to eligible borrowers qualify for full loan forgiveness if during the 8- to 24-week covered period following loan disbursement:
- Employee and compensation levels are maintained
- The loan proceeds are spent on payroll costs and other eligible expenses; and
- At least 60 percent of the proceeds are spent on payroll costs
A borrower can apply for forgiveness once all loan proceeds for which the borrower is requesting forgiveness have been used. Borrowers can apply for forgiveness any time up to the maturity date of the loan. If borrowers do not apply for forgiveness within 10 months after the last day of the covered period, then PPP loan payments are no longer deferred, and borrowers will begin making loan payments to their PPP lender. https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program
During the 2nd quarter of 2020 most in the fastener industry remained open as essential businesses while their customers were either closed or grappling with managing employees who were working remotely. With decreased revenues and the inability to visit customers, many businesses turned to the PPP for assistance. The fastener industry was no exception. Hundreds of fastener companies received PPP loans.* The industry received somewhere between $154M – $378M in SBA loans. The average loan award size of $109K is based on all PPP loan figures. A small percentage of the loans were under $150K and those figures are not included in this data. There was one fastener company that received a $5M-10M loan, although most of the loans were between $150K – $1M.
April PPP loans May PPP loans June PPP loans
$150K-350K 151 31 1
$350K-1M 124 15 2
$1M-2M 32 3 0
$2M-5M 16 1 0
$5M-10M 1 0 0
(K) $ US dollars in thousands
(M) $ US dollars in millions
According to company’s PPP filings the number of jobs saved was in the thousands. Nice work Fastener Industry! We are an industry that has always served our country in keeping the supply chain moving through world wars and pandemics too.
- April jobs maintained 14773
- May jobs maintained 1968
- June jobs maintained 134
It would appear that the infusion of cash allowed the industry to maintain jobs and assisted in the growth of many companies. The Fastener Distributor’s Index has reported positive gains for the past 7 months as well.
Thus far in 2021, the manufacturing and wholesale trade have already accounted for 15% of all new PPP loans. With a renewed emphasis on controlling Covid19, the country is expecting to get back to business by the 3rd quarter of 2021, barring any hiccups, and I’m sure we can all agree that can’t get here fast enough.
*Sources: Small Business Administration, US Census Bureau, Internal Revenue Service, Bureau of Labor Statistics, & CNN. Data published by SBA on July 6th, 2020 includes all approved PPP loans worth $150K or more. Data for loans worth less than $150K is not included in this database.
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